Swing-Trading The Stock Market At All-Time Highs | Podcast Episode #28

0:00
Hey, everybody. This is Ryan Mallory doing podcast episode number 27 with you today. And I gotta tell you, I am just really thrilled about the, the outpouring and the, uh, sincere feedback that I’ve been getting on this podcast about how, um, it’s been helping you guys and making you better traders and really helping. you to hone those skills of yours as it pertains to successful and profitable trading in the market.

0:24
So, yeah, every month, the viewership keeps on growing, the downloads keep getting bigger, and, and that’s exciting. It feels like you’re saying something right. Pretty cool development this week in the stock market. We’re trading at new all-time highs. And if you look back, it’s been a while since we’ve done that.

0:40
We hit the all-time highs back in late January, and then we had the huge subsequent sell-off. In the stock market, and it was nasty. I mean, I think at one point, January is at like 7%, and then it actually went into the red during February. And since that bottom on February 9th, we’ve really just been churning sideways a lot.

0:59
We’ve been making back the profits and everything, but there’s been a lot of ups and. Downs and it’s frustrated a lot of traders. If you look at like the performances of hedge funds this year, it’s not been that great. Um, one of the things that has helped us here with Share Planner and in the swing trading splash zone is just, uh, taking profits, protecting profits, and moving up stop losses and not trying to push our will on what we think the market should do, but rather what the market will give us.

1:23
And that has played a big role in our success. Today, I want to focus on trading in the stock market, swing trading actually, the stock market at all-time highs and how we can do it. First, how do you trade it? Do you, do you just simply keep buying stocks as they’re breaking out to new all-time highs?

1:40
Well, for one, you want to keep a good eye on breath. I, I still don’t think the breath is really where it should be in this market. Um, I think it’s improving. We’ve seen the T2108 indicator, which is a measure of Stocks, the percentage of stocks are trading above their 40-day moving average.

1:57
We’ve seen it get back over 60%, but honestly, I mean, my past experiences with that indicator and the market trading at all-time highs, it usually goes somewhere between 70 to 80% of stocks are doing that, and right now we just aren’t seeing that. Yesterday, we saw it dip back to 58%.

2:13
So, There is some concern there because a lot of the stocks are not keeping up with the bigger move in the market, which means that you have a bunch of big stocks that are making Uh, the lion’s share of the move or taking the lion’s share and really pushing the market higher. So that’s, that’s one thing.

2:29
So, you want to make sure that you’re not overcommitting to the, to the upside as the market’s rallying. The thing is, is when we’re trading, it says, well, I’m gonna get as much money as I can because this market just keeps going higher and higher and I don’t want to miss out. I’m, I’ve been this week about 40 to 50% capitalized here and I’m doing fine.

2:45
I’m keeping up with the market’s move and everything, but what I’m also trying to do is just consistently make profits, whether the market’s down or whether the market’s up, I would just want to keep adding to my bottom line and not, um. Dealing with the, the, the wild swings because I’m not managing my profits accordingly or correctly.

3:03
And So when you trade the stock market, you’re going to want to make sure that you are putting yourself still in good risk reward situations. Perfect example of that. There’s been a number of, of trades that I’ve had to pass up on.

3:19
You take CGC, it’s a big cannabis stock that a lot of people are excited about and, and are making a good chunk of change off of it too. I could trade that one and, and if I would have, I would have made a, a good profit off of it, but the stock loss wasn’t there. I can’t manage the risk. So, If you can’t manage the risk correctly, it doesn’t matter if it’s a good market or bad market, you got to pass on that trade.

3:39
There was a couple of times even with Netflix this week, and gosh, I knew this thing was gonna bounce. I even, I even had a close friend of mine talking to me. He’s like, this thing’s gonna bounce and And I was like, I know, I know. And then I saw a bounce on, on Monday, and I, I didn’t really like the risk reward there. So I kind of waited.

4:02
And then, of course, Tuesday, Wednesday, Thursday, and Friday coming, we’re, we’ve gone from like the low 310s to, you know, the mid 350s, and that, that’s frustrating. Um, I think there probably was a way for me to traded that one a little bit better and I could have jumped on it, but there was always a better risk reward setup.

4:22
So, while I was intrigued by the Netflix trade setup, there was other trades that I liked better and some of them were For instance, Wayfair, where, you know, I, I just closed that trade out for almost 7% profit.

4:42
Then there was Twitter, which was almost a 5% profit, and then you had Micron, which was over 7%. And then we got Salesforce, which is over 3%. So it’s not like I missed the Netflix trade and didn’t get into anything else that was equally good. I did. I got into plenty of trades and they’ve, they’ve treated me all pretty well, but, um, I still, as a trader, you always look back on the, uh, missed opportunities.

4:57
Um, Netflix, while there was times where the risk reward wasn’t as great, um, It, it would have been nice to have had that one. So, that’s how you trade it, uh, you know, continue to look for trade sets that offer valuable risk reward setups.

5:18
Don’t just buy it because everything feels like it’s going up and you can’t go wrong because you will eventually go wrong. This rally that we’re on right now will go wrong. It will go down. Um, I don’t know if it’s Monday or next week or next month or the end of the year. Nobody knows, but it will happen and you want to make sure that you are protecting your profits along the way.

5:35
So The other thing is to avoid the temptation, this is going to be kind of like a two-step point here that I’m making. Avoid the temptation to overthink this market. So avoid the temptation to overthink the market. Don’t try to look into it and see something more than what’s really there.

5:55
The market’s trading at all-time highs. It means that the stocks as a whole have never done as well as the market’s doing right now. As a collective whole, the market, stock market is great. But, and I see some of this from people on Twitter and onto Twitch, they’ll say, yeah, but I’ve just never seen a market where it just doesn’t pull back that much.

6:15
It’s like we only pull back like 1 or 2% and then we just go straight up higher. Well, guess what? That’s kind of indicative of a bull market where people are going to buy the dip.

6:38
And, and buying the dip, uh, BTD, that is not a new thing that the market’s done. The Market’s always done it. Sometimes it’s more aggressive versus other times, but it’s always done it. Otherwise, we wouldn’t be where we’re at today.

6:54
Avoid, avoid the temptation to overthink it too much. You don’t want to try to make more of what the market is saying that it’s there. I mean, for a good point would be saying, oh, well, Trump’s gonna get impeached. I need to get out of the market now.

7:10
Well, he may and he may not, OK. There’s, there’s no way to know, and there’s no way to know when that would even come to fruition. So while you might be fearing that, Another year or two could go by before anything even develops on that front.

7:31
The next point is avoid shorting it for whatever reason, and I don’t know. I guess, I guess I probably did this some too when I started off trading, but people want to short all-time highs for some reason.

7:51
That’s bad, man. That’s really bad. Don’t, don’t do that. Don’t, don’t short the market at all-time highs. Why would you?

8:06
Obviously, the Bears are not doing something right here or we wouldn’t be sitting at all-time highs. So don’t short the market at all-time highs. Um, it’ll just probably keep going higher.

8:24
That doesn’t mean that on a pullback of 1 or 2% that there might not be a setup for you to get short on the market, but when it’s just printing new highs, there’s no reason to get short on it.

9:00
I’d also like to say that when the stock market is continuing to print these new all-time highs and continuing to march higher, one of the best things you can do is, is use the moving averages because essentially if the market’s at all-time highs, all the daily moving averages are going to be underneath it.

9:15
And so one of the really good things to do is to measure a market’s. Behavior or willingness to continue to climb higher is to use the moving averages that are trading underneath price to gauge, you know, how aggressive it’s continuing to be going forward.

9:31
So if it breaks the 5-day moving average, OK, not a game changer. We closed below it yesterday and obviously the market’s up higher again today, but it’s something that you can start saying, OK, let’s see if this is something that continues to develop.

9:53
And keep raising your stocks, guys. Don’t, uh, just get comfortable with the market. Don’t get comfortable because we’ve been up 4 or 5 days in a row and It just feels like it’s easy money.

10:08
I’ve been raising them and I’ve been, I’ve been selling positions every day almost this week.

10:24
So know that when you’re trading, If you have to get out of a trade, it doesn’t mean it’s the end of the world.

10:49
It’s a feeling, it’s there, it’s excitement, and that’s OK, but you got to know how to manage that feeling and you got to continue to look at the trade for what it is and what it’s doing.

11:14
And also, I would, I would like to finally wrap this all up with focus on the goods sectors, and I talk about this a lot in my podcasts, but in a really good market, we kind of think that everything’s moving up at once, and that’s not always the case.

11:33
You still need to do the sector analysis. You still need to follow which stocks in each sector are continuing to trend higher.

11:50
So that’s my podcast for today for trading the stock market at all-time highs. Remember, avoid the temptation to think about it too much.

12:08
Avoid shorting the stocks. Use moving averages for knowing when to get out of stocks.

12:26
That’s gonna be it. Glad that you guys tuned in and listened to me today.

12:43
God bless.